AGCO Corporation · NYSE:AGCO
AGCO — Q3 2007 Earnings Presentation
18 slides from AGCO's earnings presentation, Oct 30, 2007
Slide 1: Third Quarter 2007 Financial and Operational Results
Third Quarter 2007 Financial and Operational Results October 30, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements that are not historical facts, including projections of cash flow, impacts of strategic initiatives, supplier constraints, farm income, working capital improvement, production levels, sales, and earnings are forward-looking and are subject to risks and uncertain
Slide 3: Financial Summary
Financial Summary Q307 vs YTD YTD07 vs Q307 Q306 2007 YTD06 Net Sales ($Ms) 1,613.0 +36.6% 4,657.0 +22.5% Gross Profit ($Ms) 307.6 +50.6% 824.0 +24.5% Adj. Op. Income ($Ms) 107.9 +226.0% 264.4 +65.6% Adj. Op. Margin 6.7% +3.9% 5.7% +1.5% Adj. Diluted EPS $0.77 +$0.70 $1.70 +$1.00 3
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units +18% +29% +5% • YTD production up ~17% vs 2006 • Total 2007 production expected to increase 17-19% from 2006 Q1 Q2 Q3 Q4 ‘06 Act ‘07 Act ‘07 Projected 4
Slide 5: Industry Overview
Industry Overview September YTD Retail Units North America YTD07 vs YTD06 Tractors – Industry +1% – AGCO Combines – Industry +11% – AGCO Europe Tractors – Industry +5% – AGCO South America Tractors – Industry +44% – AGCO Combines – Industry +64% – AGCO 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2006 $3.8 billion Q307 vs Q306 Net Sales Excl.Translation +60% North EAME +34% America 61% +28% +19% 24% +5% S. EAME South EAPAC North Consolidated EAPAC America America America 3% 12% YTD 2007 $4.7 billion YTD 07 vs YTD 06 Net Sales Excl. Translation +47% North Americ
Slide 7: Sales and Margins
Sales and Margins Operating Sales $M YTD Operating Margin % Margins Improved $2,000 10% $4,657 $3,801 $1,500 8% 5.7% 4.2% $1,000 5% $500 3% $0 0% YTD 06 YTD 07 Q306 Q406 Q107 Q207 Q307 Sales Op. Margin 7
Slide 8: Working Capital Progress
Working Capital Progress Working Capital* : Sales 12 Month Rolling Average 13.4% 12.2% • W/C Will remain ongoing 11.4% focus 10.4% • North America remains 9.5% biggest opportunity • Long-term initiatives – Build to order – Distribution strategies Q306 Q406 Q107 Q207 Q307 * Working Capital defined as
Slide 9: Strong Free Cash Flow
Strong Free Cash Flow YTD Free Cash Flow Annual Free Cash Flow (9 Months Ended September 30 ) (12 Months Ended December 31 ) $313M YTD 06 YTD 07 $130- $140M ($27M) ($51M) 2006 2007E Working Capital Impact All Other • Fourth quarter seasonally stronger for Free Cash Flow • On track for healthy 2007 p
Slide 10: Strong Balance Sheet
Strong Balance Sheet $1,200.0 50% $1,025M $1,000.0 40% $870M 39.4% $800.0 $691M 30% 31.0% $600.0 22.1% 20% $400.0 10% $200.0 $0.0 0% Q305 Q306 Q307 Debt Net Debt to Total Capital 10
Slide 11: 2007 Impacts of Strategic Initiatives
2007 Impacts of Strategic Initiatives Pre-tax Impact Full Year 2007 Increased R&D – $ 20 M Plant rearrangements –$5M System/process improvements –$5M Growth initiatives –$5M Total - $ 35 M 11
Slide 12: 2007 Outlook
2007 Outlook 2007 Goals Total sales growth Approximately 20% Diluted EPS $2.10 - $2.20 Free cash flow $130 to $140 million 12
Slide 13: Appendix
Appendix 13
Slide 14: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Three months ended September 30, 2007 2006 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 107.9 $ 74.2 $ 0.77 $ 33.1 $ 6.0 $ 0.07 Restructuring and other infrequent (income) expenses
Slide 15: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Nine months ended September 30, 2007 2006 Income Earnings Income Earnings From Net Per From Net Per Operations Income(1) Share(1) Operations Income(1) Share(1) As adjusted $ 264.4 $ 162.7 $ 1.70 $ 159.7 $ 64.3 $ 0.70 Restructuring and other infrequent (income) expense
Slide 16: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Three months Three months ended ended September 30, September 30, Free Cash Flow 2007 2006 Net cash provided by operating activities $ 59.3 $ 64.4 Less: Capital expenditures (34.7) (33.0) Free cash flow $ 24.6 $ 31.4 Nine months Nine months Free Cash Flow ended ended
Slide 17: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Projected Year Year ended ended Free Cash Flow December 31, December 31, 2007 2006 Net cash provided by operating activities $ 250.0 – 270.0 $ 442.2 Less: Capital expenditures (120.0– 130.0) (129.1) Free cash flow $ 130.0-140.0 $ 313.1 See accompanying notes in the Co
Slide 18: GAAP To NON-GAAP Reconciliation
GAAP To NON-GAAP Reconciliation Net Debt to Capital Ratio September 30, 2007 September 30, 2006 September 30, 2005 Long-term debt $691.3 $869.7 $1,025.1 Less: Cash and cash equivalents $166.8 $166.5 $27.3 Net debt $524.5 $703.2 $997.8 Add: Total Stockholders Equity $1,853.6 $1,562.6 $1,534.8 Total C